Mark Nash, portfolio manager of Jupiter Asset Management's £1.3 billion ($1.7 billion) Strategic Bond Fund, has completely exited U.S. Treasury holdings—the first time in nearly a decade the fund holds zero exposure to U.S. government debt.
Nash's thesis: markets are pricing sovereign risk beyond fundamental reality. He is repositioning the fund's $1.7 billion into Japanese government bonds (a new strategic position for the fund), shorter-dated German debt, and emerging market securities.
The moves contradict consensus. Bond markets have sold off long-dated issues on mounting concerns about fiscal sustainability and central bank tightening cycles. Nash is betting this repricing has overshot.
The European allocation reflects Nash's view that ECB rate hike expectations are overdone. The emerging market addition diversifies away from developed-market government debt entirely.
The Strategic Bond Fund's repositioning constitutes a material reallocation of a $1.7 billion portfolio—a wager that yields across the Treasury curve no longer compensate for duration risk relative to foreign alternatives.
